Creating employment (III)

Resuming a series which began last month (part I, part II)…

If not natural resources industries, and if not tourism, then surely to goodness the entrepreneurial sector is driving the run-up in jobs across the province. As the MiniBiz once said:

“Small and medium-sized enterprises are invaluable to this province and demonstrate qualities that reflect our incredible strengths as a people,” said Minister O’Brien. “Creative and resourceful, hardworking and resilient - these are traits that set Newfoundland and Labrador and its people apart in a competitive global environment. They are evident in our vibrant and innovative blah blah blah blah blah.”

Those go-getters, the self-employed and small businesses, must be driving all that employment growth. Right?

Nope.

The following two graphs show the twelve-month trailing average of the number of people who are self-employed in the province (data in thousands). For example, the figure displayed for May 2009 is the average of the twelve months up to and including May 2009. This smooths out the seasonality in the self-employment figure, allowing for a long-term, apples-to-apples comparison.

In the twelve months ending in May 2009, an average of 21,400 people were self-employed in all industries. That is off the recent high of over 28,000, recorded in July 2006. That recent peak was comparable to previous peaks, which were recorded in 1994 and 1998.


Taking a longer view, the May 2009 drop brings the number of self-employed down to numeric levels not seen since the late 1970s.


Similarly, the importance of the small employer in the labour market has been stagnant or in decline for the second half of this decade. Employees who worked in enterprises of fewer than 50 employees account for less than a third of the overall employed labour force. From a modest peak of 34% in 2004, the trendline has slumped steadily downwards to 32% in the first quarter of 2009. This chart shows the percentage of the employed workforce who work in such small enterprises, as a trailing average of the previous four quarters. Note that the vertical scale is exaggerated in this chart, which does not have a vertical baseline of zero.


[Data sources: Statistics Canada tables 281-0041, 282-0011]